What's Good about Religious Fundamentalism?

Iannaccone, Laurence R., Science & Spirit

Radical fundamentalism has been called a "new" problem. But to understand it today, we can draw on economic theories from a few centuries ago. The key to understanding Osama bin Laden, for example, could be the free-market economic ideas that Adam Smith elaborated in 1776.

Smith and bin Laden are an odd couple. The absent-minded founder of classical economics spent his gentle life teaching in the cold seaside city of Glasgow--a quiet corner of eighteenth-century Scotland far removed from Saudi deserts and Afghani caves. Even so, Smith's economic theories demystify modern religion and explain its extreme manifestations. Through economics, we can understand fundamentalism's enduring appeal and its many good consequences.

To look at the good and bad of fundamentalism--to compare the suicidal zealot and the self-sacrificing saint--is not moral equivalence, as some would declare. An environment that sustains commitment and produces collective action shapes both--economics explains why.

Economics today tries to explain just about everything: discrimination, drugs, education, crime, sports, politics, marriage, and fertility. When it comes to religion, the economist sees people as "rational religious consumers." Consumers think about costs and benefits. They choose how extensively to participate in religion and which religion (if any) they will embrace. Likewise, religious leaders act as "suppliers" of religious goods and services. Taken together, these consumers and producers form a "religious market."

The competitive process that leads to better material products also works in the religious marketplace. Successful religious "firms" must provide goods and services valued by their "customers." Fundamentalist groups are particularly adept at producing collective goods--both spiritual and material. They often are key suppliers of health care, education, housing, food, and financial aid. But how do we get from these social services to suicide bombings?

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Many Americans view religious violence as the product of theology and deprivation. Militant Muslim clerics preach violence as a road to salvation and indoctrinate followers who suffer from poverty, ignorance, and anger. But this popular view of radical Islam is deeply flawed. If theology is so important, for example, why are most terrorist groups not religious? In fact, the secular Tamil Tigers of Sri Lanka have initiated more suicide attacks than any religious group.

Suicide bombing is more strongly linked to a certain kind of organization--a sect--than to any particular theology. Most sects devote great energy to benign activities, such as running schools, health clinics, and social services agencies. How do we make sense of this association between sects and violence? The economics of religion can give us a clue.

Economists study how people overcome scarcity: How do they produce and exchange material goods and services? Humans may also feel a scarcity of cultural goods and services, so they invent and exchange them as well. Religions are cultural products that employ supernatural powers. No one can prove that supernatural "products" really work. But mere uncertainty has never been enough to kill the desire for them (such as the promise of life after death).

From a rational point of view, supernatural investments make sense for those who do not know that the "skies are empty" of spiritual benefits. Therefore, from a rational economic standpoint, secularization theory has been the biggest predictive failure in the history of social science. Individuals and groups have not become more secular because of science, modernity, and education. Most members of extreme religious sects are not irrational or indoctrinated. They choose to participate in the religious marketplace because the supernatural remains attractive.

We have never lacked entrepreneurs in the supernatural economy--we have prophets and priests, seers and shamans, and pastors and ministers aplenty. …

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